tv Squawk on the Street CNBC October 23, 2012 9:00am-12:00pm EDT
we figured out how to sell songs on itunes and amazon. people will figure out how to get that music off of there. the thing that is important is that this leads to selling new gigs. people will get ahold of your music and want to buy tickets to your show which is what i have been hanging on for 25 years. >> that does it for us. it's time for "squawk on the street." good tuesday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer live at the new york stock exchange. the dow erased a triple digit loss yesterday for the first time since december. several top or bottom line misses as a two-day fed meeting begins. we brace for a wave of pmi data from all over the world tonight. the road map goes like this.
we'll start with corporate earnings mostly the blues. du dupont posted an earnings miss. how worried should we be about a global slowdown? >> apple is upping the ante in the mini wars. can the move to go small beat back challenges of the likes of google. we'll begin with earnings reports that are reviving jitters about global growth. shares of dupont taking a hit after earnings came in short. dow component announcing plans to cut 1,500 jobs over the next 18 months. 3m matching wall street estimates with third quarter earnings but lowering the outlook citing current economic realities and u.p.s. reporting earnings in line but revenues short of forecast. it's been said this morning that
the last hour yesterday was the biggest fake pump in the history of trading given the news we're getting this morning. >> it was a play-action fake and turned out to be a pick six. when i look at the numbers this morning, i want to distinguish them. u.p.s., we expected bad. we gave you bad. 3m expected okay. got objectinkay. dupont, wow. talk about good travel trust names and talk about bad ones. this was a case where there should have been a release saying we're missing the quarter big. >> why? >> i'm looking at this -- >> is there any sort of -- does a company has to? why should a company should or ought to? >> the short-hand by s.e.c. had been if there was a 5% deviation as much as 10% deviation, you ought to come out and say it. that's been the hidden rule. this violates the hidden rule.
it would be right in the crosshairs of what the s.e.c. does not like to see. they won't get in trouble. the tradition and custom has been if you are that way off n consens consensus, put out a release. >> we've been talking about where earnings relative to expectations. we're not just cutting guidance. we're cutting jobs. dupont will cut 1,500 jobs. this kind of environment hits home when you see that effect. >> everyone says this is not 2008. this wasn't 2008/2009 feel which is, listen, we do have a lot of cash. good. >> jpmorgan saying that companies if you look at the s&p 500 so far even just those reporting corporate cash at 14%, we keep on this pace a new record high. 1.5 trillion. they're doing that. it should stem the impact of the fiscal earnings cliff. >> dividends have been raised. tons of money for dividends.
3.6 -- let's put it this way. stocks go down. yields go higher. 4% by the end of the day. >> let's get back to the bigger picture for a moment which is we'll be down sharply today. when you look at what was expected in the second half of this year, it was acceleration. we're not getting that acceleration. i don't want to get people -- you sound somewhat negative this morning. >> i expected something better from a big american company that told us things were better. >> it's big dow stock. >> one hedge fund manager i speak to frequently says everyone is moon walking back their numbers. they are moon walking back their expectations in terms of what had been acceleration. we do still have tail winds. >> you can't be positive when i'm negative. >> the world is off kilter. >> he said '08-'09.
come on. >> i think maybe you take the combination of the man with two brains, me and david, come back and say it's not as good and not as bad. >> this is split personality. >> jim, all right, so yesterday the low intraday 1422. when is your appetite wetted? >> i love 3.7 yield. it's been the great way to be able to get in things. it's been a floor in this market courtesy of ben bernanke who we now know is out the door according to that column. i believe that will be the floor again as much as you may not like earnings, u.p.s. it was the floor. i think it will be the floor for dupont. >> can we put a level on that? >> you talk about 45 a level where you have to buy dupont. >> i wonder why aren't equities
doing better? you have investors talking more positively about europe. you can look at german spreads. they are back down to pre-european crisis and pre-financial crisis levels. people say if this hangs together ultimately, have we priced in the risk and is europe looking cheaper? yesterday china, as we talked about. that may be one reason. >> we will be down because fifth straight quarter of gdp in spain going down. i don't think it's helping today. when you look at it, they still haven't asked for a bailout. austerity is not helping the growth. there is no growth. i'm not sure i'm willing on that front willing to go positive. >> the tech companies in europe are awful. >> if you sort of look at both of them and say they're awful but which one is cheaper right now? europe is cheaper than the u.s. >> for good reason. >> that's the argument.
>> talk about no growth. >> housing is still good. regions financial not a good bank but that was an outlier. >> whirlpool reports you are in the midst of a returning spin cycle inside a dryer. this was the first quarter that made me feel, wait a second, you know how you spin around? >> i imagined a fraternity inside a dryer. wonder if they ever tried that. >> whirlpool has been a disappointor f e disappointer for most of the year. >> in the end, let's go back to what carl said. what was that rally yesterday? a rally that felt romney would do a good job. >> we have a situation macro
versus bernanke's bid under the market. >> if it weren't earnings report season, it would be terrific. it's like what you were saying before. if the international debate had been first -- >> foreign policy. >> how would that change the outcome? reports do sort of keep with one theme which is split personality between u.s. businesses and u.s. consumer. the real question is can that relationship hold up? >> then we had those companies that are tech that straddle both. they are western regional. and yet this whirlpool, that's a consumer stock related to housing. they said over and over again if housing gets going, they are now lean and mean. they're not enough whirlpools and coaches to overtake the duponts. >> they said we missed the
consumer boat. we should have been more aggressive on that front talking about areas of strength. >> talking about a consumer company, there's a company called apple, maybe you've heard of it. it's in the spotlight as the company is set to launch a smaller version of the ipad later today. known as ipad mini. analysts and tech experts expect the device whose actual name isn't yet known to be half the size of the ipad but larger than the kindle fire and as for price, most guesses, $299. company's presentation will begin at 1:00 p.m. eastern time. the event comes after apple shares had a good day. best day in five months. stock closed up 4% from yesterday's session, which was an interesting move. >> more of the same of what carl talked about. >> when it comes to apple, we talk about price points that would put it in a position to compete against the kindle or
nook. >> they have always invented categories which they're not doing this time. those who want to take enthusiasm out of the event say why are they being suddenly a derivative consumer products manufacturer. interestingly, they are streaming the entire event on apple tv. >> arm holdings which is the chip for apple reported good number. very interesting to see a semiconductor company actually rally. especially after texas instruments. i didn't see anything about the walkers from walking dead as a reason why texas instruments didn't do well opposed to last night's conference. there wasn't anything about homeland being a reason why texas instruments isn't doing well or the playoffs or even the fact that megatron had a few points. they left out a couple of things. everything else was in there.
that was kitcheni insink, dryer everything was thrown in. toaster was thrown in too. >> how do you explain coach in the midst of this? >> very screwed up. i don't know. he's on tv with maria. i felt lou screwed up and he would get america right and he did. he's just a bankable guy again. that was a tricky interview. he's saying that fourth quarter will be good. everyone has to thread the needle in europe. >> right. we'll see. called the third quarter a blip in the course of the year. we'll see if that happens. >> it could have been down 15 points. >> meanwhile, yahoo! one of the morning's bright spots rising in premarket on the better than expected results. on the first earnings call since taking the job as ceo, marissa mayer outlined what she believes should be yahoo!'s top priority. >> yahoo! hasn't capitalized on
the mobile opportunity. we haven't effectively optimized our website. we've underinvested in front end development and we splintered our brand. we have more than 76 applications across android and ios. all of this needs to change. our top priority is a focus, coherent, mobile strategy. >> cnbc and yahoo! have a business alliance to share and co-produce editorial content. half of the engineers should be mobile engineers. sounds like there could be acquisitions over time. >> as small as 100 million or less. there has been speculation and you can imagine bankers are shopping anything to yahoo!. they don't seem to be interested in going for the big bite, which makes sense. you know, she did not offer specific details other than kind of what you just heard in terms of the broad focus if you can use those two words
consecutively on mobile. we'll see. generally speaking, analysts at least think it was relatively positive quarter. microsoft search deal going to go away. that could hurt them in the not too distant future. the core business some say trades a little over one time even. >> i like this conference call. it was the beginning of what i regard as a little bit of realism from yahoo!. they totally missed mobile. she's going to put the company on track. i like this call a lot. there are a lot of interesting points about it. she criticizes directly the microsoft deal. she said yahoo! will have to be a predominantly mobile company. we'll hear from facebook after the close. i would have loved to hear we must be and microsoft, we must be google. remember google did not do well. >> isn't the question not so much identifying mobile as a strategy but monetizing it. >> no one has been able to do it so far.
>> it's fine to say this is where we want to be. where is revenue and earnings going forward. >> where is the rest of it to quote ronald reagan's great movie. >> can you imagine if scott thompson has done this call. the company has done a ways in terms of credibility on the street. >> she has great credibility. there's a great article in "the new york times" on the front page about mobile. there it was. open table and yelp they say are successful. they do not pass the test. they're too big. >> it's interesting. all of those are mobile applications that are vital and business is solely mobile. again, if she can figure it out where others haven't, there will be traction. >> and how about the fact she
said our great strength is that we have no mobile strategy at all. >> not that google has done a bad job with it. >> google has too much inventory. when you look at the list and put these companies now and screen cuts off. >> you go from 11 inches to 4 inches. >> it changed the world. >> it will get figured out. >> do you watch tv on a mobile? >> i'm lucky if i can pull up the browser. i have a blackberry. no. i'm in the dinosaur period. >> do you -- you do watch games. >> it's a great thing to sneak when no one is looking and if that ad is good i'll see what's going on down there. check the menu. watch victor cruz. >> it doesn't work on a blackberry.
>> other than football, i don't. >> that may explain why the department of security is moving from blackberries to iphones as we learned for one of their agencies. 17,000 users. >> it's just very funny. i'm watching the debate last night. i'm tweeting. you did such a great job. i don't know how you are there and here. >> neither do i. >> two things that didn't come up were covert action. brief mention of drones, and then europe didn't really come up except for a throw in of greece. >> india wasn't mentioned once. that's gotten attention as well. >> i just thought you had an opportunity to say, look, europe and maybe president should have done more. i remember in michigan romney specifically said, listen, europe is up to their own. i look at what's happened this morning and i still think europe is behind a lot of weakness.
>> when we come back, what will it take for facebook shares to reach higher ground? social networks set to report after the bell as jim said. we'll take a closer look at what the charts are telling us as the fed gets ready to kick off a two day meeting, there's speculation bernanke is unlikely to stick around for a third term. one look at futures. down triple digits. we'll see how today goes when we come right back. tween listeninge numbers... ...and listening to your instinct duff & phelps finds the sweet spot that powers sound decisions. duff & phelps financial advisory and investment banking services. riding the dog like it's a small horse is frowned upon in this establishment! luckily though, ya know, i conceal this bad boy underneath my blanket just so i can get on e-trade. check my investment portfolio, research stocks... wait, why are you taking... oh, i see...solitary.
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3m the latest company to miss on the revenue side adding to the string of companies who have not managed to hit growth on the top line raising concerns about growth going forward. we'll dig into that in just a second. first, want to take a look at what's happening with facebook shares as well. facebook is set to release quarterly results after the bell. analysts expect the social network to earn 11 cents a share in the third quarter with revenues of 1.23 billion. investors will look for evidence that they have a game plan to grow revenues. facebook shares lost half of the value since the company went public five months ago. jim, there's this big article in the journal yesterday. a former colleague over there basically saying facebook is going to be a game changer maybe we see a bottom in shares. what do you make of that? >> i read that column.
i was blown away. that was the most positive facebook column ever. >> a gift to investors. >> wow. can i just ask because you worked at the journal. that was a highly unusual promotional piece making me feel that there is revenue to be found here for facebook. >> what's interesting is to see it take a hurt on the street for analyst cal pieces as one of the longest that they've done. it's because he's sticking his neck out. that takes perhaps 900 words to explain and defend that kind of position. >> it could be a moment. we do not have that long before we realize if facebook does a better conference call, they have to do a conference call that does not sound like a bolt on conference call. i would say here's the new revenue stream. that gets the stock going. they should just read the journal. >> get out there and read the article. >> read the article.
better than what they did last time. we had mobile. we had mobile. we had mobile. we had mobile. zynga. it's still too early to buy zynga. >> is it? just want to make sure. i'm glad you added that. >> we have a technical analyst on facebook later. >> what did they say? >> we'll find out. >> last night cramer over here talked about whether you should set great expectations for the market. more classic advice. jim's mad dash is next. the biggest earnings excuse of the day and which company is behind it. as we go to break, here's a look at futures. dow down 145 points.
>> tuesday edition of "mad dash" starts right now. if i gave you a monster beverage right now, would you drink it? >> i would be concerned. i'm really starting to think that maybe i don't know where it will bottom. i have to tell you i think it's a little bit of trouble today. >> i'm taking the beverage back. how worried were you when you got this news? >> we have been saying there's going to be fda action, regulatory action on "mad money." the reason we've been saying that is because we're in a different year. concussions on front page of the times. drinking this stuff i felt that my heart races. i had to eliminate this entirely. a lot of people have been switching to red bull. i don't think that's the way to
go. we should be like david faber. they serve pomegranate smoothies at his house. i was surprised that romney didn't integrate clean coal into foreign policy. you can only take foreign policy so far. >> talk about class size. >> your tweet about larry being unhappy was it for me. >> that was incredible. we'll get opening bell after a short break. apple hoping for big things by launch of the smaller ipad today. should you believe the hype? we will talk to apple shareholders about what they want to hear. could bernanke soon hang up his monetary gloves and robert shiller is ringing the opening bell. we'll find out why when "squawk on the street" comes right back.
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108. managed to erase all of its losses plus two points. can it come back from 145, 150 down? we'll find out. at the big board, robert shiller celebrating listing of the barkley. jim, i don't know where you want to start. >> u.p.s. look at this. is the buyer back from yesterday? coach? look, u.p.s. should not be up this much. >> i mean, it brings up a good point about companies that have in softer ways messaged weakness and then they come out with lower guidance. caterpillar. >> the poor expectations at u.p.s. and then you do okay moves the stock up and here we have a situation where u.p.s. i
felt there was little hope and it turns out, wait a second, people are now saying, you know what? maybe they have a good plan. >> u.p.s. trailed rivals since that tnt deal was announced in the spring. have people priced underperformance here. it's stranged eto see the reacn this morning. >> i see europe as the major weakness. china may offset. >> don't forget how important europe is to china. we've been reminded of that. we keep going back and forth on this china bottom, is it starting to rebound? it gets back to european banks as well which wrote an enormous amount of credit for receivables from china and have cut that business out entirely trade between these two regions has dropped dramatically we know in terms of china into europe primarily. i want to point out, 61% of
companies have missed revenue estimates so far with about a quarter of the companies having reported. that's similar to the second quarter where we had 59% missing revenue numbers in the second quarter. >> it's not off by much from what we saw from the second quarter. >> it's a good point. i think that the attitude i hear is this whole thing has to correct. and then you come in and you see stocks down a little bit. not a lot. you see money go to safety stocks. goes one area to another to another and it doesn't seem to leave entirely. >> it's capital allocation is what it's about? it's not necessarily about growth. >> isn't it weird that we have big industrials underperforming but discretionary stocks, coach is number one winner on s&p. hog doesn't do too badly today. things easily deferrable purchases, it goes back to what
we're saying consumer sentiment versus business sentiment. >> where are we in the cycle? we're not necessarily seeing the same kinds of behavior. usually consumer discretionary does well first. when you have suddenly late into a rally like this, consumer discretionary leading gains, it doesn't key with typical progression of things. >> there's the ceo last night of polaris on "mad money." expensive atvs are selling the strongest they ever have. i don't know. you have three or four. i don't have any. there are 16,000, 17,000. is there something you need less than an atv in troubled times? honestly. do you go to -- the dollar store and atv. what the heck are sales doing so well on atvs. >> the financing market is so strong. that's where the real activity is. maybe there's actually financing out there for people to buy atvs
who don't necessarily need them or who couldn't otherwise afford them. >> i asked him about credit. he said the majority of bought with credit. i got to put that down there as this is a very nutty where we are in the cycle so hard because people are buying more whirlp l whirlpooling and moss atvs vehicle and what's not doing well is dollar tree. >> dollar tree? >> dupont is down 7%. monster down 5%. we talked about the degree to which the market is punishing those that miss. we said that yesterday. those are severe. that's a big deal for dupont. >> have to hear what dupont has to say. my travel chest owns it. like to reveal what i got wrong. i thought ad business and safety business and life science division would offset and by the way, they have solar. anything that has solar is just -- i mean romney wants to
expand his wrap should talk about the companies that are solar divisions where solar is killing them. >> maybe today is the day you would want an apple product launch. the apple store online is now down as it normally is going into the launch of something new. 1:00 p.m. pacific time. if it's impressive, it may provide leadership like it did yesterday. >> it may. going into the original ipad announcement we may not have -- in fact, even after it we perhaps did not appreciate what had just occurred. we'll see. i'll be curious to see what price points are. it may be that people are anticipating too low numbers here. they always go for premium product and premium price. let's not forget following this up next year, most people who follow the company closely believe we'll get a television or whatever you want to call it. perhaps they'll redefine television the way they redefined a phone. >> redefining coverage. mr. inside and mr. outside at it again. i found coverage was riveting
last time for apple. >> i believe the analyst is saying that in k llooking throu the website, they put the pricing up. it points to a higher price point for the 4. >> margins so good. >> that's where you want to be, isn't it? >> how many people do they have? >> 330,000 employees. maybe a little less now. >> let's get to bob pisani on the floor with more on what's moving. good morning, bob. >> this is starting to get tricky and a little bit dangerous here. we had what a lot of traders call sucker's rally yesterday. there are people annoyed about what happened. 90-point rally in the dow we saw in the last hour, what was that? i called around for an hour. what i got was nothing. a big buy program. it was apple. i'm sorry. it was a buy program and apple participated in it. it occurred on nothing. the effect was it blew shorts
out of the market once again. you have a dangerous situation. you have a lot of shorts out of the market and you have a weak europe and lousy earnings commentary this morning. that means there's nobody in to cover it at this point makes the market more dangerous. so what we're seeing here is not just that 3m reduced earnings estimates, dupont missed and didn't provide good guidance. what's happening here is now that tech provided poor commentary, now we see other industries. we're seeing industrials. materials. what i call multiindustry companies. the companies i like to cover. these are the companies that sell a lot of different regions in the world. many different businesses. make stuff behind the walls. they make the stuff behind the automobiles. they make the stuff behind the airplanes. they make health care equipment. i'm talking about your 3ms, illinois tool works, your honeywells, ges, big global companies that sell to a lot of industries. you want to look there for trends. here are three trends that the
multi-industry companies are showing so far. number one, they're all missing revenue forecasts. david was referencing the numbers. i'll give you updated numbers in a minute. that's the most important trend. they are missing revenue forecasts. number two, the orders are slowing down. the book to bill ratio for most of the companies are below one. many reporting delays in new projects as well. the concern now, new concern the last two days is that capital spending might slow down in 2013 and that would definitely affect all of these companies. the third trend is that there's really no help from any particular region. neither from china, which appears to be bottoming but no one is for sure. europe is weak. we're not sure if that will get weaker or better and u.s. is showing weakness. no help from any region is a real trend. here's where we are. 144 companies reporting. 60% are beating estimates. more importantly, this gets to david's point, revenue growth only 0.8%. hard to grow bottom line with revenue growth. fourth quarter, revenue growth is 3.2% coming down and earnings
growth is now 9%. that sounds pretty good but that's the lowest it's been so far for estimate for the fourth quarter. guess who is walking by? an old friend of mine and old friend of cnbc who rang the opening bell. i want to get your comments on the earnings situation because you watch it closely. what's your thought on what's happening right now in earnings? >> i think the big picture, earnings were extremely depressed around 2009 them have shot up. all of this is subject to mean reversion. you can't trust current earnings. i see high earnings now. i expect it not to do well. this is a big fundamental factor. >> 2010, 2011, we had double digit earnings growth and now this is just normal reversion? >> i argue that we look at earnings wrong. we should look at longer averages of earnings when judging price. i have this price divided by ten-year average earning. it gets rid of the cycle effect. when you take account of that,
earnings are not as high as they look now. i expect them -- you can't be sure -- to mean revert. >> you were here ringing the bell for a product that you have. >> it goes into sectors where price earnings ratio is really low and not just short-term low. >> so quickly, based on that idea, what's a buy right now? what sectors are worth a buy? what green signals are you getting? >> health care, financials, industrials, energy. all of these have low capes right now. >> robert shiller, we'll have more on that later on. always a pleasure to see you. robert shiller from yale ringing the opening bell. >> thank you, mr. shiller. it would be great if that were happening all of those areas are down. let's shift to bonds and dollar. rick santelli at the cme group in chicago. >> good morning, jim. we're back to the same dynamics. we're looking toward europe for answers. we see some of our own company
laying off. how are these dynamics playing in the marketplace? interest rates are down a bit but you need a two-day chart of r-10s. went up yesterday and down today. this is the pattern. we're backing off from this 180 level. yesterday rates were up. today rates are down. that dynamic gets more exaggerated from short to long maturities. dollar yen, i tell you what, this dollar is flying not against every currency about against the yen. i think japanese are cheering behind closed doors. remember, they're an export economy. look at this chart. intra today or open it up to june, you can see these are highest levels for the dollar since june. everybody is talking about spain. they didn't have great data. then again, very little. we hear they are set up to help their economy. set up to help their refinancing operations. back over 3%. we're way down where we were. it definitely is a pop in rates. back to you. >> thank you.
let's check out latest moves in energy and metals. let's go to sharon epperson. >> bears are firmly in control across the board in the commodity space and there's a great deal of concern about spain. that started the sell-off that we saw overnight. then of course growth concerns really are front and center whether we're talking about the world's fourth largest steel maker in south korea or we're talking about dupont and caterpillar at home. it really underscores what bob was talking about. the multiindustry global industrial companies that are seeing weakness affecting industrial commodities as well. oil prices at the lowest levels we've seen in three months time. copper at a six-week low and silver sliding. we're continuing to watch what's happening to gold prices because as you mentioned, it will be key to see if gold is able to stay above the 1,700 level. there have been a lot of sell stops put in place and concerns about the fact that the euro
finance ministers haven't come together and concerns about the fact that china has not stepped up to really help this global slowdown story and we're going to watch to see what happens with the flash pmi data out of china on wednesday. that could be a key driver for the gold price as well. back to you. >> sharon epperson at the nimax. >> utx shares not doing much today. it was interesting. bob's point about the lack of revenue growth. typically when you are this long in the year or cycle, however you want to say it, and very little revenue growth, you would see more acquisition and merger activity. utx are getting anticipated revenue growth from the goodrich acquisiti acquisition. we can point to many different reasons coming back to the end of the day, the confidence of the ceo or lack thereof, but, you know, a lack of revenue growth usually points to a robust m & a environment when
you have a trillion and a half dollars on borrowing sheets and lowest borrowing cost of all-time but we haven't seen it. >> small companies that likes of yahoo! will eventually be acquiring in the latter -- getting late in this year but perhaps in the first half of next year. >> i was surprised. i said, geez, that was smart. aerospace is part of the economy that's still working. goodrich steel was good. you're right. revenue can be answered by taking that phone call from goldman, which is -- what do they do? they pitch a company every seven seconds. >> every 12. every 12 seconds they have to pitch a company. >> you call back. you should do that and do this. they get the heisman. everyone does. that could change. it may change and especially if we have this no revenue growth environment continue. >> we're seeing that emblematic
of why there isn't more activity. worried about the fiscal cliff and earnings cliff. yes, cash balances are high but in terms of historical levels of having cash on the balance sheet, we're not overly extended. there may have been a return to more formal periods before the last couple decades where they say we got caught so short in 2007, 2008, 2009, we don't want that to happen again. >> there's definitely a good memory in sense of they have that memory of that period. >> maybe more dangerous if they take the foot off the gas when it comes to buybacks which has been a major support. >> it has. >> and special dividends going into the tax changes. >> many people still question the thinking about buybacks and whether they are beneficial or not and whether it's the best use of cash. >> i feel it helps the guy who is leaving more than the guy that's staying. >> when we come back, it appears marissa mayer has a way. do we have good writers or what. yahoo! stock popping after the
new ceo's first earnings call. we'll delve deeper into her changes. as we head to break, look at bright spots on early trading. dow suffering the biggest down since friday. back in a minute. ♪ ♪ [ male announcer ] it was designed to escape the ordinary. it feels like it can escape gravity. ♪ the 2013 c-class coupe. ♪ starting at $37,800. ♪ starting at $37,800. why they have a raise your rate cd.
there aren't many bright spots on the map today. if you look at the dow, there are a couple names trying to fight their way into the green led by utx, at&t, microsoft also to the positive. underperformers warning out there with results today. disappointing the market. as you can see, whether it's the dow or s&p 500, there's not many sectors here to hide. >> interesting that we went for months without so much as a 1% decline on the dow. months. now we're working on our second one in three sessions. >> advance to declining volume is extraordinary. we're seeing some stocks -- never mind. it's october.
>> it's about time. >> jinx month? >> it's october. >> in other words we need some sort of decline. >> we have to get a little movement. >> we're getting that. >> a couple weeks away from a presidential election. >> i wonder if it would have been this bad if google hadn't had the release mistimed. that added an element of surprise to what was going to be a bad quarter any way. >> i don't know if the surprise factor of it was really when it was released as opposed to how bad it was. >> google making a comeback today. that's what i was going to mention. i figure on twitter people accuse me of this being a sea of red and why focused on google? >> you mentioned '08 and '09 this morning. >> i just threw it out there. >> liven things up a little.
>> really? liven things up. >> when we come back, bottom line blues. should you believe the tune certain companies are singing on disappointing results. but up next -- >> coming up, market volatility hurting your head. >> he has a headache. >> no, i don't. >> how about now? >> it's coming. >> cramer has the cure for the insanity. >> don't forget to dot the is. >> certainly. >> six stocks in 60 seconds when "squawk on the street" returns. for over 60,000 california foster children,
and a path to success. joining the soccer team. getting help with math. going to prom. i want to learn to swim. it's hard to feel normal, when you can't do the normal things. to help, sleep train is collecting donations for the extra activities that, for most kids, are a normal part of growing up. not everyone can be a foster parent... but anyone can help a foster child. only one thing can brighten this market day. that's simon hobbs. >> in three hours time we'll know if apple has it with launch of ipad mini. we'll talk about that with two shareholders in the next hour of the show and what marissa mayer is doing at yahoo! and fundamentals on facebook going
into their earnings tonight and more importantly we'll talk about this market and whether the bernanke put is dissolving before our eyes. back to you. >> let's get to six in 60. six stocks in 60 seconds give or take a few. >> rbc says buy. if you see this go up, china stimulus is working. >> pmis tonight overnight. news out of target. >> they sold their credit card division for a huge amount of money. not as much as i thought. still, it's good stuff. >> rbc says worst days are behind viacom. >> viacom going up so this stock is now reverting. >> during the break we were comparing the price of radio shack and zynga. >> they are in a foot race maybe to oblivion. soon it may be worth more. >> you mention the quarter. >> stock was up big. people get faked out in after hours.
>> you had the cfo of chipotle on last night. great interview. >> buying stock hand over fist for what it matters. it's still just a burrito. i know taco bell imitated it. same price as panera now. >> buy more of those names. he said people may foregoing soda. >> wasn't that interesting. >> lines are as long. >> store count still good. people not buying that additional soda. i found that astonishing. you cut back on soda? you buy an atv and cut back on soda. >> we have a controversial story on tonight. we have chuck bunch. no teflon. >> there's one 52-week high this morning. whirlpool. >> that's great. >> talk about reversion of the mean.
>> they got it right. they said over and over again they would. they've done it. big brazil division. brazil floated them for a long time. congratulations to them for multiple restructures and it's working. >> we'll see you tonight. 6:00 and 11:00 eastern time. when we come back, more on a big day for tech. a crop of apple shareholders will tell us what big things they hope to hear about. more on the sell-off and how you should navigate the blue ship bl blue which is it comes to earnings.
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welcome back to "squawk on the street." a sea of red on the tape today as big earnings misses from key industrial games like dupont, 3m, weigh on the broader markets. how worried should be you about a global slowdown? from industrials to the tech world, apple stepping up its game as tim cook prepares to unveil the so-called ipad mini in three hours. we're talking pricing, sizing, competition and more. plus, how will the new device affect the current product lineup? >> marissa mayer's wall street
debut sending yahoo! shares higher today. three short months after taking the helm of struggling yahoo! is it enough to turn the tide for good? first up, a steep drop in the dow today as skepticism grows. what's next for the markets? ubs director of floor trading art cashin joins us here with thoughts. a lot of things were written over the weekend about friday's decline. among them that it was orderly trading, nothing really out of the ordinary. is today the same way? >> pretty much. we're seeing a little bit more volume in the morning and we're seeing what looks like a little bit more international flow. i think some interest from across the pond may be where you have to reach somewhere else to get the liquidity that you want. that's the key difference. >> some of the big names in the green today, get more than half
of their revenue from the u.s. are we back to that? is europe still the underlying issue here? >> i think it is. it's the global economy. we still haven't gotten away from china. you have a couple things going here. the earnings from the multinationals are not good. you already had weakness showing up in europe. even some comment from wilbur ross looking at some spanish banks and said no thanks. i think i can wait a year. they haven't gone through the real estate. spain has gdp down. it's more pressure for a bailout. things are heating up over there. last night at the debate, we heard about sequestration and that has everyone thinking about the fiscal cliff a little bit more. >> i was going to ask quickly on that point about spain. significant the short selling ban expired yesterday. is that adding pressure here? >> when you think there are going to be holes in the market
or changes in rules like that, you want to get through the door before it closes. >> i would be worried that something more profound is happening here. it was described well a couple weeks ago when the fed has driven a wedge between market prices and fund yamentals. people have made money from that wedge being inserted. what's happening now? are fundamentals deteriorating and asset prices are coming down and wedge is hanging in there or is the wedge beginning to dissolve partly because in two week's time romney wins the election and he doesn't want a fed that behaves this way? >> i think it's a bit beyond that. it looks like the fed -- we talked about it being less and less effective each wave of qe. and this one as kevin noted this morning seems to be failing on a broad front. different asset classes are all lower than they were when the fed announced it.
your wedge can contracting but -- >> it's a struggle. if you read from dupont through to what's happening in europe, you have people in the real economy increasingly struggling. dupont coming through with another round of wage cuts. are we going down again? >> it looks like we're under pressure again. the key here is that the revenue line is getting hurt the worst. and it shows how nimble and savvy the companies are that they can take decreased revenues and still kind of meet their earnings targets. that's not going to continue forever. >> i tell you what's maybe more worrisome is names that have been punished not the most but to a large degree have been where people were hiding. mcdonald's, right? ibm. ge. it's had great run. is that -- how does that weigh on your mind right now? >> it's always concerning. it is a place that people were hiding and the idea that this is a giant and multinationals, weak
dollar, all of the benefits we got since we came from the march 2009 low have accrued mostly to the multinationals and the dividend payers. if they're going to get on the punish line now. there's going to be fewer places to hide. you can see that in the high yield bond area that the other place they hide. >> walk us through levels here. >> we've already broken what was an important level, which is in the s&p 1418, 1421. you got down to 1413. next level is 1408 to 1411 and we challenge 1400 itself. i would say 1398 to 1402. you'll have gary kaminsky on later. he has a different level from his friends. >> a two handle for the first time in a long time here. is that the one to watch of the big three today?
>> well, it had been the lagger. it got the benefit when apple decided to defy gravity yesterday and that's going to be put to the test. as simon says, we have a product introduction. if that doesn't go as well as everyone hopes, it could compound things worse. >> it will be fine, i have faith. we'll cradle it in our arms like a small child. innovation is alive. >> hope is not a strategy. you can keep it with you but don't depend on it. >> art, thanks so much. art cashin. >> there's chatter this morning over "the new york times" article that fed chairman ben bernanke won't stay on. steve liesman is here to give us his take. >> "the new york times" article by andrew ross sorkin
underscoring what's baked into the market. bernanke in his his last term as chairman having been appointed by president bush for the first and president obama for the second. the discussion is who will replace the chairman and how much faith can people have on what he says if the fed chairman will leave in early 2014? it makes appointments for now providing continuity to the fed but powell's term erxpires january '13. and duke is another one whose term may be up. if bernanke chooses to stay on, many believe he should do to preserve the independence. there's much for the central bank to discuss. also not a lot to decide. here's some of the things on the table for the fed. something called the treasury
cliff. i'm calling it that. operation twist will end and stop long-term treasuries. what does it do when it ends? expectation is that it goes out and buys long-term treasuries in addition to mortgage backed securities. they're debating whether or not to have numerical targets. many members have expressed unhappiness with calendar date guidance. and then guiding market expectations is going to be key for the fed here. how do you calibrate how much qe the fed does with economic data? we used to deal with interest rates we don't know how to do it with quantitative easing. all of that should make the minutes that come through wednesday and after the election more significant than usual and should build toward an important december meeting that's going to set policy expectations for 2013. we'll talk to anlan greenspan o
"power lunch." he may have some insight. >> this article that bernanke may not be around for a third term. the significant article today is next to it when people talk about what happens in two week's time in romney wins and immediately some say an assumption that he's against what the fed is doing at the moment that the federal reserve will jolt in one lump effectively balk more hawkish because your expectations on who will fill it going down the road are going to change dramatically if romney gets in and expectation in this article that the asset markets will react to that. interest rates will react to that two weeks from today. would you agree? >> i don't agree. the federal reserve set a course. i think it will resist political pressure. i think the only reality to that, simon, will be if markets begin to bring forward the idea that maybe late 2014, early 2015, it becomes an early 2014
guess by the market when the fed begins to raise rates. i don't think that romney will have the ability to actually affect any changes at the fed although the president has the option to jaw bone the central bank. >> if obama is re-elected, we should note that there will be one more dove as a voting member next year. if you price in obama sticking around and you think perhaps no matter what happens with bernanke that he replaces someone similar, would that point to a more dovish stance for the fed? >> i think the fed right now is about as dovish as it's going to get. i don't think more dovish is potentially on the table in the sense they said wide open until the unemployment rate comes down and not a lot of concern right now about inflation. it's hard to imagine how that could get more dovish than it already is. >> good point. steve liesman, thank you very much.
alan greenspan interview at 1:30 here on cnbc. don't want to miss it. let's get quickly to the market desk. bertha coombs is here with regional bank space. >> financials are down today along with the rest of the market. goldman sachs says regional banks may have little or no earnings growth over the next two years without a pickup in the economy. they say things are really slowing down as people look ahead to potential fiscal cliff as you can see regional banks today suffering among the worst losers this morning. >> thank you so much, bertha. when we come back, apple preparing town veil what many say will be an ipad mini today. two shareholders will tell us why they think this announcement could be a game changer for the company. >> as if that wasn't enough, how a better user experience appears to be translating to a better investor experience. we'll look more closely at marissa mayer's new move on yahoo! and whether they can pay off for you in the long-term.
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>> the market looking rough. apple this afternoon attempti i to prove it has what it takes. it should announce the new ipad mini. it will be the first major piece of new hardware for 2 1/2 years from apple since they innovated with the ipad itself. >> we call it the ipad. we're going to introduce today ipad 2. the second generation ipad. >> today we're announcing the new ipad. and it is amazing. >> of course today's announcement comes a day after apple shares had their best days in five months. let's bring in two apple shareholders for their incisigh.
michael, let me come to you first of all. what we're seeing here is this is a major important inflection point for apple to prove to everybody that it can still innovate and still bring major new hardware products and categories to the market and they'll be a success. >> i really wouldn't go that far. i don't know that this is huge innovation. i think it's really a great business strategic move. amazon, google, they've proven, samsu samsung, a smaller tablet can succeed in the marketplace as a reader or more portable device. that's really the key here. apple is broadening the population they're selling to and this population is not only going to use their products but you're going to see the halo effect moving on macs which you
continue to see them gaining market share against windows. >> i think it's more than that. i listened to brian white this morning on cnbc. he said smaller and with lower price point means you can sell it to schools. you can put it in the classroom. importantly, you can sell it around the world in emerging markets. it could be the nokia. >> that's not innovation. that's a good business strategic move. i agree with everything you just said. innovation is different than a great business strategic move. i'm a believer in the product. it will sell huge. apple already ordered 10 million. i think it will be a huge seller. let's be clear. this is a great business move. >> okay. do you think that there's a danger here? there are so much other seven-inch tablets around as your colleague there referred to. what happens if people don't cradle it in their harms like a new small child and talk fondly
of it tomorrow morning? >> hard to imagine. i think there is always the risk that apple in this instance is late to the smaller form factor but to michael's point, it's required. it's less expensive. we've already had lots of data points that suggest customers want it. closer you get to that $99 magic price point where you get mass adoption of consumer electronics. this is what apple needs to continue to do. this reminds me of the ipods. we got smaller form factor and smaller price point and we got greater and greater penetration of the ecosystem and greater and greater strategy from apple to generate more sales through their itunes store and it's perfect. this is exactly what they need to do right now. it's more evolution than revolution. we should expect it. you should expect them to do a good job at it. it's a matter of what's the cost and what do we see and how can they execute? we'll think they'll do fine. >> you mentioned the halo effect
being an important one here for apple hoping to get people buyibuy ing macs and not just this device. we've been talking about the google laptop. the light guy that's going for pretty low cost. is there not the risk that these products are eating away at the halo effect they might otherwise be enjoying? >> the google product is really a cloud product. $299 or $350. that's a completely different product. the amount of apps that are available on google device is an internet surfing device. the key for the ipad mini or whatever it's going to be called is that the apps are very much going to be similar to the regular ipad app. it's not going to cause developers to have to go out and redesign their applications. apple can charge a premium and they will have to probably charge a premium. imagine the price will be 300, 325. they'll have to charge a premium because they look for profitability but i think people will pay for that premium if all the apps they bought in the past
can go on the smaller device. that's why i think you're going to see such wide adoption of this device. >> we should note that there's some comment they may have been raising the prices on the other ipads in preparation for this before they put the site offline. before we lose you, let's talk about the agony that shareholders have been going through recently on what exactly each of you has been doing with your stake in apple. have you been buying as prices have gone down or selling? what should investors do? >> sure. so in large cap growth product particularly, over 8% of the index and over 150 active. another call at 9.5% of the fund is in apple shares. we have taken the opportunity to pull back position sizes and did so a month or so back wouhen it
was around $700. i won't give you the clue what we'll do tomorrow. we've been interested in the stock as it pulled back 10% with the rest of the market even more so. relatively inexpensive compared to the growth rate and execution. we're constructive on the shares short-term and long-term. >> what's your gut feeling? where will it be by the end of the year? >> i suspect higher but not drastically so. a lot of folks will want to see what units look like and pricing to michael's point and what the rates look like. 5 million units this quarter, how many in december is the big question? >> what have you been doing with your stake? >> i will tell you, at this price it's a buy. we have a target price of $800 to answer your question. i think it will be close to $700 by the end of the year back to where it was. i do think you're going to see investors recognize that even though consumer discretionary is
having troubles, even though we're having bad earnings reports, this is the one consumer company that consumers seem to gather all their money and go toward this product. it's going to be one of the -- the ipad mini is one of the hottest items for christmas. you need to do what michael said. take profits when you get toward 700, 725. long-term stocks are a great opportunity still. >> the stocks are up 55% for the year. what's wrong with taking profits now? you have done great. >> there's nothing wrong with taking profits now. that doesn't mean you eliminate your entire position. it's a portfolio management strategy. if the stocks are up 55%, you take some profit. if you think the stock has a higher target price, you continue to roll in the stock. >> we'll see. 1:00 eastern this afternoon. cnbc's coverage starts. thank you. >> and take a quick look at the market just now. another leg lower. we're seeing the dow now shedding 205 points and all
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happens to be gasoline. the reasons behind the fall we see in energy prices and concerns about global growth, those aren't good. if you're a driver playing 30 cents a gallon less than you did three weeks ago, you're happy. we're seeing a drop in a number of regions. when you look at some places in ohio, oklahoma and missouri, they're paying less than $3.25 a gallon. national average around 3.65. that's a silver lining in that we look at lows of the session right now across the board in the oil complex. back to you. >> thanks very much, sharon epperson. that global growth affecting oil and treasury prices as well. more and more companies this earnings quarter starting to lay on the excuses when it comes to missing results on both whether it's the top, revenue line, or earnings. art greenburg is back at hq and has more on that subject. >> no target comes close on texas instruments. jim cramer said it was a throw
in everything but the dryer quarter. they are pulling out all stops when it comes to what they became. the fiscal cliff, china, europe. they do say the impact of its customers responding to poor demand for their products. key customers, which they did not mention but generally are known and have been mentioned in s.e.c. filings include nokia and research in motion. companies without question the economy by the way is without question the most popular scapegoat. i give several companies credit for looking through it. 3m whose ceo said we'll focus on things within our control and then there's radio shack which deserves a special shout out. not because its stock is turning around at 5% on what would be horrible results. they must have said something interesting on the earnings call. rather than play the blame game, the interim ceo came out and said overall our business
performed below expectations. finally, this has zero to do with the blame game. pay attention to ryder. this may be one of the most important stories of the day. the company had good results. the stock is flying. the company said commercial rental business is off. this is rental trucks. that's what they're in the business of doing. not cars. trucks. commercial trucks. and these are usually a leading edge on the economic recovery. we're hearing some companies talk about the u.s. looking okay but here you have ryder saying that business is coming off a little bit. that's going to be one to watch. i'll look into that as the day goes on. back to you. >> terrific. thank you for that. >> can i just pick up this point. i think it's very important. when you have dupont, u.p.s., united tech, 3m, big strindustrs coming through, let's not disregard what's being said here as an excuse. there are reasons to a certain extent. if there's anybody who is out of
contact with what is really happening, it is the market. the market is inflated by what the federal reserve has deliberately been doing with it. these guys are running the business in the real economy and those warnings are large and real and the situation may be deteriorating. that's why the market is down 228 points. >> that's not a warning. it's an indication. one of my really good sources on this says uncertainty driven substitution trades, remember, rental is a substitution, he says they have peaked and the next bubble is doing without. so this is where we are right now. as people try to figure this out. i can tell you, nobody has got it fully figured out. >> that's for sure. we'll leave it there. thanks very much. stick around. investors still aren't looking facebook during the third quarter. stocks are down 30% over those three months alone. we'll look at what we can expect from the company's results tonight and what do levels say about the stock? we'll get technical just after
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welcome back to "squawk on the street." we're in the midst of a broad based sell-off with s&p down 1.6%. nasdaq composite not as bad. you have the likes of google, yahoo! and facebook all up. nonetheless, there is damage done here, bob pisani. let's go over to you now. we'll get more on what's going on. >> not any improvement really. at one point a few minutes ago, now we're down 247 points. the worst point decline for the dow since june 21st. look at the s&p 500. very interesting thing here. remember that sucker rally, that's what everyone is calling it yesterday when the dow went positive after being down 90 points. a lot of people were trying to play a game this morning. heavy volume at the open and selling and that means people are buying the open when it's down like that. hoping it will have the same thing happen. lift late in the day. we'll see. so far that's not happening. down 250 points at 3:00 in the afternoon many will bail out. that's the worry. three months on s&p 500. look at the recent high we had. 1471 or so.
we're maybe 4% off of the recent intraday high. no correction going on but this is sort of the worst decline we have seen since june lows. let's move on here. not a lot of help from europe. we're sitting at the lows for the day in germany for example we're going to close in an hour. there's german index on intraday basis. earnings situation, what i call the big multinational companies. the 3m, illinois tool works, guys you want to watch that do a lot of multinational work, all had rather disappointing commentary. you see dupont down 8%. u.p.s. doing better overall. not a lot of places to hide. with tech beaten up recently, they thought they would get a turnaround early on. google and microsoft are not down as much but this is hardly a buy the move down in tech stocks. yahoo! this decent earnings. nothing in the green. we're close to 90% downside.
90% of the volume and stocks are on the downside. even here not as bad as overall market. here's standard flight to safety stocks. also on the downside. i want to note the banks are weak again today. regents financial having the same problem. net interest margin compression story on front page of the journal recently bringing down the regional banks. we are getting some of the banks into and close to correction territory. i'll talk more about that in the next hour. david? >> watching the likes of bank of america down too. goldman sachs off 3.5%. thanks for that update. we're at the lows now down 1.7% on the s&p. >> the dow jones industrial average down 250 points. 246 at the latest. some tough earnings misses from industry giants like dupont and u.p.s. make it hard for the market to find traction. how worried should we be about a
global slowdown? hi, charlie. >> thanks for having me. >> of course. thanks for being here. maybe you can help explain to us what's going on here. do earnings really matter? >> yeah. i think the value to state the obvious of a stock is the present value of the future earnings and i think people across the investment community are taking down their earnings expectations a little. not a lot but a little. we're finding out that europe, which let's remember is a little bit bigger than the united states is slower than people thought so big international companies are seeing roughly 20% of their businesses off in europe coming in slower and so people are taking estimates down again a little, not a lot. >> the other factor certainly seems to be the role of central banks here. if you look at gold taking a hit today. that would suggest that we don't have the kind of move where people are pricing in more action. if anything, it's pricing of less accommodative banks.
is that legitimate in your view? does it have to do with "the new york times" article circulating this morning on talks of who would replace bernanke. >> i would go three factors. again, europe. i would go disappointment with last night. market is probably rooting for romney a bit and people would say obama did better last night and earnings expectations being lower than they were. let's not forget. market is about 14 times. that's a 7% earnings yield compared to 1.7 on treasuries. the market still looks attractive. >> i understand the classic thing to say is market is rooting for romney and people that surround me at the new york exchange and elsewhere are certainly rooting for romney. is that the right thing to do in an environment where the market is pumped up on money from the fed since romney objects to that? and if he is elected presumably it is less likely that they will further pump the market with
money at the fed. >> so if you ask the market participants as a tradeoff clearly easy money is good in the short-term but bad in the long-term for inflation and other factors. in general right or wrong the market thinks that obama is more negative on business than is romney. tax code, how you treat capital gains, et cetera. i'm not arguing who is right in this debate. i just think that on average the market is rooting for romney. >> i think what i'm getting at is an article on front paining of the "times" business section that if romney is electeded in two weeks, you could see a big move in interest rates as results of that. that's a reality that maybe some people are coming to terms with today. >> i don't think that's right. i do not think we'll get a big move in interest rates if romney is elected. >> i'm just asking the questions. >> tomorrow a fed statement. i can't imagine that they would respond to the past few days of weakness in equities. is there something -- maybe
investors are perhaps fearful that tomorrow might be some sort of clarity that they really have exhausted their last options? >> i know it's been true that fed actions have been big drivers but i don't think that's what's going on today. if you call across the street and talk to people about how they're valuing stocks today, this is about people taking down expectations for corporate earnings. i think we all think the fed is going to be accommodating for the foreseeable future. >> i guess one thing that raises the question is if you look at what was happening across europe, we saw the sell-off begin before the u.s. session and before we got results from a lot of those companies. it seems to be something at play here beyond what we learned this morning. that's why if you look at correlation picking up again, if you look at sell-off that we saw start earlier in the day, you have to wonder if that's the whole story. >> yeah. i'm sorry. i feel like i'm not giving you the answers you want. i feel this is more fundamental.
investors like me probably had expectations for earnings that were a little high. now we're coming down. i don't think this is about quantitative easing. i don't think this is about fears in fed policy. if there is one thing they're united on, interest rates will stay low for a long time. >> my only point was to a large degree this year stocks have been punished on micro and they have gone up on macro. gone up on central bank hopes. i wonder if the second half of that equation has flattened out if investors have fewer reasons to -- >> fair enough. it's unlikely we'll get positive development from the fed from here. adage about you can't push on a string. that's probably right. at this point we all think that the fed is going to be easy for the foreseeable future so there's no more good news to come. that's probably fair. i'm just arguing it's not going to get a reversal. nobody thinks we'll get any tightening even if romney is
elected. >> all right. then we'll leave it there. charlie, thank you for your time. reiterating clearly it's fundamentals drawing investors today. >> can the ceo do anything to calm investor fears? the boss of all segments is next and we'll bring you developments on today's big sell-off down 247. look at some of the most actively traded stocks today. we our schools... ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
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dupont is the biggest drag on the dow industrials today. take a listen to what the ceo told "squawk box" back in april. >> we have a great product lineup in seed and crop protection chemicals. seed volume up 20% in the first quarter. we're going to see a very strong ag season this year. >> all right. stock down over 8%. senior associate dean at the yale school of management and
cnbc contributor, jeff, perhaps some would say including my colleague jim cramer this morning, maybe we should have gotten a little bit of a heads-up here that business had turned. where do you come down on that? >> you know, when you take a look at how google had an early warning release before the market closed and people were so upset at them, of course it wasn't intended, is how you handle the bad news is a tough issue. i think they've been very transparent with concerns over regulation fd and ellen coleman is very anxious to look like she's not jumping the gun in selective disclosures and how you give hints are tricky. many don't want to give guidance at all. here we have a surprise of bad news. you remember in fact even when jack welsh took to the wood shed with disappointing news one time
when jeff disappointed. a lot of this is currency issues. some is volume. some is old businesses in the process of being passed to new hands and hands of carlyle that some of the downterms were. there is a business which really took a hit. that's a business actually that ellen coleman grew up in that business. it's the color white. it's a commodity type business. they've been trying to get out of commodities and getting into nutrition and energy areas that look exciting. electronics. >> many people will be taken by the fact she's cutting 1,500 jobs in an environment where we're trying to work out where global economies are now going and whether we are going to expand or contract around the world. when you get a major like dupont saying it's again cutting jobs in response to falling sales,
that will worry people that we are all collectively or at least part of the world heading back down. do you think that is now what on ceo's minds, another round of mass layoffs or are we through that? is this just a dupont thing? >> that's really an insightful and appropriate question for this company in particular. i'm glad you ask it. you do highlight what is frustrating about this is that this is not maybe what we would call a paternalistic employer. it's been a company that's been very proud of its culture and traditions. this is not a company quick on the trigger for hiring and firing of volatility that we see at other companies. this company looks longer term for every job placement and painful to let 1,500 go. i don't have inside knowledge here. i don't think we'll see another round. this is very painful.
you see companies in the past that used to have giant numbers of people go in and they would wake up one day and jay we're getting out and 3,000 jobs would disappear like that. that's not the way. they go into life sciences and reinvent themselves. that's not how dupont has managed. there's exciting growth areas. they had acquisitions and investments that have taken them into an interesting twist into nutrition and into trying some interesting new opportunities and optical displays that they see themselves as a technology company but not an i.t. company per se. they're not a commodity chemical company. they have great brands. they have under leveraged some of the marketing appeal of these brands. they continue to reinvest and lead the market in those kinds of distinctive brand inventions. >> we appreciate your insightful
comments. thank you. >> we have quite a sell-off. we have stabilized down least. we have stabilized down 231 points on the dow. more on that, of course, from cnbc throughout the day. and rick santelli will join us in the next hour of "squawk on the street" from chicago. rick? >> the story today, but it's an old story, is about the fed. ben bernanke keeping rates for a very low and long time, but how long will ben bernanke be around? that's the question. and remember markets tend to do things in a digital sort of way. so really the issue is about the exit, and we're going to talk about that at the top of the hour. [ male announcer ] do you have the legal protection you need?
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arm holdings makes the chips in the apple iphone and ipad and many of the other tablets you see on the street. good market to be. >> including that new google chrome laptop. talking about the selloff, we are at $2.37. important to notice. but most of the falloff is due to these stocks, chevron, bim, and cat. obviously, it's a comment on earnings around the world. >> because they are the companies that are reporting, arguably. >> dupont, yeah. >> as each comes to the table. you get that composite view, david faber, that things are not as rosy around the world as r. or as we might have assumed. >> at least stock prices have taken them to assumptions of underlying earnings. s&p down 1.7%. we talked about this at the 9:00 hour. perhaps there was a hope there
would be a reacceleration or acceleration in the second half of this year in terms of earnings. it hasn't showed up. we have 61% of companies that missed revenue numbers as opposed to earnings in the second quarter. not that big of a difference, but the market taking note of it. >> where's the top line growth? this is the point they've been making all morning. we see revenue missed by a good chunk of companies. when you look into 2013, where's the nominal growth coming from? >> seems like the accelerant today, if there is any, is oil. three-month low, a big part of the weakness in the dow, exxon and chevron. that's going to drive these energy names lower. that's a comment on the global economy too. gordon is joining us at post 9. down 236. what do you think? heavy volume, critical levels. tell me more. >> i don't know if we've broken down through any of the major support levels here. if you look at it sort of taking
a step back, you get 1410, 1460 on the s&p still being the spots. i'm not sure you can say this is where we get into the freefall mode where it's time to bail. i think some of this might be coming off of yesterday's debate. i think people were looking for maybe a little bit of a romney rally, and you take into account some of the earnings numbers, which is the primary foe dus, a and a little sloppy performance, you're talking about the sale, the skew between up volume and down volume is really ugly today. >> it has been a good year. you could arguably say this is profit taking over certainly the last couple of weeks. it's been a relatively good run. >> no question about it. look, we're certainly up. we've had a good spot. guys are getting a little bit spooked. this is a tough time of year. you've got people that are looking to take off their risks. they don't want to hedge. they want to put their capital to work. and then they're finding that maybe they're a little bit too exposed. and now they see something that
looks like it's a reason to sell, and they're jumping on board. >> is it year end for a lot of people, end of october? >> yes, it is. and p diddidepending upon whicht is and how they're managing it, they're looking to the end of the october. >> so if you participated, maybe you take it off. >> especially if you're not hedged, and you find yourself vulnerable. you don't want to have to take it off the table and then find yourself underperforming then redemptions and all those kinds of things that make fund managers lose sleep at night. >> at this pace, it could be our first down october since 2008. is that significant? >> if it breaks down further, i would say it is. if we can hold them and maybe start to retrace some of today's losses. the earnings have not been good. obviously, this thing is all about earnings. if you want to look at one thing, look a lot of the macro things, but this is events driven, earnings driven. if we continue to see sloppy earnings, more selling into it. i think that's why guys are getting out now because they don't want to get caught in case
this thing starts to build momentum to the down side. so potentially yes, but at this point not yet. >> gordon, good to have you. thanks for running over. of course, we're going to remain all over the selloff. some of the biggest losers in the session and the names you need to know next. it's a new day. if you're a man with low testosterone, you should know that axiron is here. the only underarm treatment for low t. that's right, the one you apply to the underarm. axiron is not for use in women or anyone younger than 18. axiron can transfer to others through direct contact.
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live at the noerbg stock exchange. 234 points. that's essentially the worst day we've seen since june 21st. up 7% on the year. but the last 2% down day was june 1st. we're talking about the worst day for the markets in months. it's not lost on some people that were really only 110 points above dow 13,000. dupont the biggest loser today after posting a weak third quarter, slashing its full year earnings estimate. company saying it will cut 1,500 jobs in an effort to cut costs. and yahoo one of the few gainers held by the sale of the stake in ali baba group. ceo marisa meyer suggesting the company could buy back stock. markets sharply in the red. dow on track for its first
october loss since 2008. we'll tell you how to protect your portfolio. then it's one of the few bright spots today, coach, the luxury retailer one of the top performers. is it time to buy a little luxury. plus energy one of the most potly debated topics ahead of the election. we'll tell you who's in a position to win in a post-election world. and apple is at it again. the tech giant preparing for a media event in san jose in just a few hours. we'll go there live to get a preview. want to bring in alec young, global equity strategist with s&p capital iq. alec, welcome. good morning. >> great to be here. >> there's no disagreement this is largely about global earnings from a few very important multinationals. >> it's also about the street having to recalibrate expectations on a go forward basis. investors are a little bit taken aback companies are having such a tough time with the top line now. how are they going to handle the
fiscal drag we're going to see next year? even if a lot of that stuff gets pushed out, most people agree a lot of the tax benefits that we're enjoying now are going to go away. we're looking at some degree of fiscal drag in 2013. most people agree we're looking at a fiscal drag on the economy. if most companies can't make the revenues now, how are they going to make lofty earnings expectations for next year in an environment for the economy may be even weaker than it is now. >> alec, the weakness is centered largely in industrials, largely in energy. oil, by the way, off 225. why the relative strength in discretionary, luxury, things that are american -- u.p.s., amazon, ebay, coach, harley -- managing to stay in the green. what does that tell snu >> because we're still the best house on a bad block. we've been overweight discretionary for a while on the idea that our data not great,
but it's steady and actually been improving a bit lately. and we've been underweighting materials. these globally exposed sectors are more vulnerable to the deterioration. the chinese and japanese data, problems with spain and europe. you're seeing dupont, which is one of the biggest names in materials sector down 8% today. i think when stocks of that quality react that way, it tells you that wall street definitely was not expecting what it heard. i think the problem is, as you look ahead, there's really no reason to expect any improvement any time soon, at least not until we know where we stand with the fiscal situation. >> there's that. and then, of course, the global macro picture. we're getting pmis tonight. we'll get them from china and europe. wednesday is a big day in terms of macro-data. i wonder, alec, if some investors are going to confirm some things we're hearing on the corporate front. >> i think that's exactly right. while we have seen a stabilization, the pmi and
europe at 45 to 46 last month and china from 49 to just under 50. they're still in contractionry territory. modest upticks aren't going to get it done. i think these numbers start to move sharply in the right direction. i don't think you can blame investors for being pretty skeptical that that's going to happen tonight. >> seems like the s&p will not be too aggressive in terms of buying on these dips then. >> i think there's probably a little bit more to go on the down side. get into the 1800s, and the risk/reward will look more interesting. but we continue to look at the trades at the expense of the globally exposed areas. >> you make the point. u.p.s., utx, even some of the industrials and multinationals that have done better today have more than half of their revenue from the u.s., right? that's your point about us being the best house in a bad neighborhood. >> it's a tired theme. people have been playing it for a while, but that doesn't mean it can't keep working. we still think it has legs.
>> finally, on the comp, we know technology has been challenged today, down more than a percent this morning on the nasdaq. any chance at all -- this is just -- i'm just throwing it out there -- that a truly impressive apple product once again revifs the enthusiasm that has managed to lead the market for most of the year. >> our analyst that covers apple, he's probably in the best position to speak of it, but yesterday apple had a $35 run in anticipation of today's announcement. i think, even if it is a great announcement, it may already be priced in. >> alec, thank you so much for your time. good to talk to you. an important day, alec young over at s&p. capital markets editor gary kaminski joins us on set. always likes to pick a good day. >> we're going to do this realtime, carl. i want to bring up the mdx. larry, thank you for the information. you just mentioned the nasdaq, carl. we did hit the 200 moving day average, which was at 2653, we
bounced off that. if you're looking for something positive, that's a good sign. another good sign, possibly, on how you think about it, i don't think today was about earnings at all. i don't think there's any surprise here. printing money around the world doesn't help corporate profits. anybody who's a real money manager knew that wasn't the case. today was just confirmation. if you look at what we did in terms of good news with the nasdaq, let's bring up the s&p. the s&p is most likely going to have to test the 200-day moving average, and that number is 1371, and that's where a lot of people are putting orders in on the s&p minis. we've got a long way to go with the s&p if you believe that markets are, in fact, correlated, which i do. there's a much bigger story, bigger than earnings and bigger in respect to the tacticals. the i think there's a general thesis that's starting to build -- and i started to hear this yesterday before the debate and only confirmed after the debate, carl -- if you start thinking about two weeks from tomorrow, right after the election, there's almost a scenario out there where both candidates set up negatively for
the market. let me walk you through why that is. obviously, if obama is reelected, you know what they are, higher taxes, the issues in terms of the sluggish economy continues, and much of the same policy, in fact, being in place. but, again, romney being elected two weeks from today sets up for the following. you know that -- he spoke about it last night, carl. you were hosting the debate. he talked tough on china. there was general fears about what a china trade is going to look like now. he didn't say it. he implied it. he believes in a strong u.s. dollar. whoever comes in as treasury secretary in a romney administration is going to be in favor of a strong dollar. most importantly, you started to hear about it yesterday. you saw it written up in papers yesterday. that bernanke put, easy monday days are gone. easy money hasn't helped with corporate profit. bernanke gone, what does that do in terms of the overall -- you call it macro, whatever you want to call it. those easy money days are gone. you're setting yourselves up in some people's minds for
something like a 1,000-point correction in the dow. if you respect the tacticals, 1371 on the s&p, we've got further to go here, and i don't think it has anything to do with the earnings tonight. >> when you say that, though, you don't mean that literally. obviously, the earnings this morning have been somewhat of a trigger. yes? no? >> i've got to tell you, todd ballmer or executive producer knows because i talk to him in the afternoons, i would have told you, before any earnings come out today, the general thesis, regardless of the numbers today, out of u.p.s., out of dupont, you were setting this up, and i think the debate last night only confirmed this general thesis sell after the election because for both case scenarios stocks are going down. and you can ask todd. i told him that yesterday afternoon. so, yes, the earnings did not matter. >> we'll try to get him on the show a little later on. >> see you in a bit. >> shifting to tech, apple just a couple of hours away from unveiling its newest product, which is widely believed to be the ipad mini. john forte and brian sullivan are live at the apple media
event site with a preview. good morning. >> good morning, carl. you hit it a couple of minutes ago. apple is incredibly important to this market. today there is a big event. will it be enough to do what it did yesterday late, which is rescue the entire stock market. here's what the expectations, the rumors, if you want to call it that, are for today's event. all the attention on a likely ipad mini 7 to 8-inch screen. also a new version of the macbook, 13-inch, and maybe a cloud-based version of iwork to go after microsoft office. and also potentially, a new i-bookstore and other products. all attention on an ipad mini. how big of a small device would it be? >> it could be very big. the question is is this jus a device that keeps the ipad momentum going or take it to an entirely new level? is this just like the mac mini from 2005 or like the ipod nano,
which really caused that to sky rocket. i'm told a set of briefings which apple is going to do before the event scheduled to start at noon. that makes this a two-hour event, and that means they've got quite a bit of news to share with us. >> and the e-mail said we've got a little more to show you. this is ostensibly about making everything smaller. here's the key to apple stock today. will the ipad mini, if we see one at a price point rumored on the blogs around $329, somewhere around that. will that be enough to bring in a new generation of apple customers that will be there for a long time, that will add to profits and revenue, that will send that stock higher? >> that's it, brian. the question is will this allow apple to further cannibalize the pc market, take that energy away from microsoft that 24th need this week for windows 8. you know, both these stocks could use the boost. the entire market could, as we can see today. >> and, of course, we're in san jose, not san francisco. we've got a big verizon truck
here that's providing extra bandwidth right behind us. there's going to be a live stream of this event. is there any expectation that we could see a real physical, not the black box, apple tv. >> near zero. for something entirely new like that, they'd have their own separate event like that. >> and they gave the giants zero chance of coming back against the cardinals, but they did it. you never know. this is a big time event. see if they can push apple stock higher, push the markets higher. this is a big stock. we're here for you on cnbc. >> we appreciate it, brian. what a great afternoon we have planned with you too. nice jacket, by the way, for it. that looks good. we'll see you guys in a little bit. let's get to the cme group. rick santelli with the santelli exchange for a tuesday. interesting day shaping up, rick. >> very interesting day, and i think the interesting story isn't really new but it's resurrected for the day, and that, of course, is the future of ben bernanke with regard to his tenure, how that will be impacted by the election, maybe how it won't be impacted by the
election. but no matter how you slice it, i've said a couple of things about stimulus over the years, and no matter what country you're from, stimulus is fungible. so are we really in a palace in wonderland as per ben bernanke? because, truly, whether it's the united states, whether it's europe, whether it's china, or whether it's japan, we are down the rabbit hole in all of these places. indeed, i think the interesting thing about the rabbit hole is that, while we're down here, everything is a bit backwards. so granted, while we're down here, we have a lot of questions, but everything from saving rates to the balance sheet of the federal reserve to the balance sheet of the ecb, everything is a bit twisted in the fundamental. for all of this, in a way, it's kind of like porky pig. what they really wanted to do is they wanted business to take advantage of what was going on, and the way they took advantage of this, well, were the mortgage
rates. think about all the big funds and hedge funds that have made boatloads of money. there's no such thing as a palace in wonderland, and while we're all down the rabbit hole, the exit that could occur if ben bernanke doesn't say or at least give us some assumptions about his future, that exit could almost be digital. why is it important? well, what happens to mortgage rates? what happens to the treasury? what happens to europe? what happens to all these rates where one form of government is helping incentivize indebtedness and debt rates to others. what happens to the mortgage more kaet? what happens to balance sheets in business? i can't tell you the answer to that. one thing i can tell you is this exit was never going to be pretty from the rabbit hole, and the notion of a quicker exit because ben bernanke might not be around, well, i think that could actually be something more intense to the marketplace potentially than the fiscal cliff. carl, back to you. >> that's a dire prediction, rick. if the tv thing doesn't work
out, man, do you have a future as an artist. putting bob ross to shame with that bunny. when we come back, is the previously dubbed stealth rally not so quietly dying before our eyes? today is the second big flushing in as many weeks. news of the selloff before the break. and coach shares spiking on news of solid double digit revenue in the first quarter. does your portfolio deserve a e luxury?r we'll tell you how to play coh. . for more than 116 years, ameriprise financial has worked for their clients' futures. helping millions of americans retire on their terms. when they want. where they want. doing what they want. ameriprise. the strength of a leader in retirement planning. the heart of 10,000 advisors working with you one-to-one. together for your future. ♪
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how do you explain coach? >> why do i root for him? i don't know. he's on with maria. get america right, and he did, and he's just a bankable guy again. >> jim cramer earlier this morning talking some coach, one of the bright spot's in today's session after reporting better than expected earnings on strong international sales. liz dunn, a senior analyst. guys, good morning to you. ed, how do you explain this? a name that we'd been, i guess, suspicious of for most of the year. what finally clicked this quarter? >> i think one of the big elements that clicked this quarter was adding coupons back to the outlet stores. there's a consumer that wants the value, wants to get the deal, and we saw that consumer come back in full force during the quarter. >> liz, what do you think? i'm looking at some of the comp
store sales in new york america, 5.5 versus some models that were basically in the 2s. did this make sense to you? >> i think it makes perfect sense. to ed's point, they did add couponing back to the factory not cha el, but also strong in the full price channel, which has had a mid single digit comp. and it's driven by strategy. their men's business, the legacy collection, which is a new launch and should carry them through the next couple of quarters. i think it's really a result of their strong strategy and those elements playing out. >> ed, obviously, the stock is doing well today amid broad weakness, telegraphed from very large multinational companies about the global economy, saying things aren't that great. how does coach continue to thrive in an environment if, in fact, those other companies are right? >> we think a couple of things. first, we think the consumer is always looking for that newness, for that great item. despite a tough environment, the consumer will still spend. we think that coach also
benefits that their business in china is still relatively young. they're not seeing some of the same issues the more mature companies are seeing in china. >> liz, i'm looking in china. sales up 40%, double digit comps. after nike, after yum, does this fly in the face of conventional wisdom about the chinese consumer? >> i think the handbag market has been a bit stronger than some of the other categories you mentioned in china. we certainly heard it from other handbag companies, mulberry today. i think it is a younger business there, but also coach stands next to european luxury brands quite well because it's an accessible luxury price point. i think they offer something different in the marketplace, up 40%. that's above their annual guidance, so they've guided to 30%, 35% growth. so they're doing better than their own guidance in china, at least in this quarter. >> we're looking at a board of
kors versus coach, versus tiffany. it's the only one in green. burberry is down almost 4%. does the good will from coach spread to the rest of the sector? >> one of the things we know with coach is it's got a very middle, upper middle income type consumer. some of these other high luxury names are not itting to see weakness. be it china, be the high end consumer. clearly, coach is a different positioning versus some of those other companies. >> what's your target on the stock, ed? >> we have a target of $80, and weed eadded the stock to our to picks list last friday. >> in addition to your targets and your view, any concern at all over operating margin down year over year? >> i'll address the operating margin. they made an acquisition in the quarter and had to absorb some one-time costs. so about 30 basis points hit the gross margin 150 basis points
hit the sg&a. so that explains the entirety of the marketing margin decline. they did leverage the business and saw gross margins up. that's not a long-term concern. my price target is $68. if it goes to ed's $80, i'd be happy with that too. >> very nice. of all the days they pick to impress us, they pick today, right? ed, liz, thanks for your time. we'll see you next time. more on today's sharp selloff. dow still down 238. the market deeply in the red. take a look at the sector breakdown today. telecom and tech are the top many froing sectors. energy and materials the worst, no surprise given that oil is at a three-month low. [ male announcer ] do you have the legal protection you need?
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on a down day, the hard drive makers are the biggest losers. western digital reporting a first quarter bead. weak pricing and delays because of windows 8. you can see today it gets a sell rating over at capital iq on the back of those earnings. and seagate technologies reports next week, and it's suffering clit ral damage there. >> thanks a lot, bertha. today's selloff started overseas, and now there's only a few moments left in europe's trading day. going to be interesting to see how it affects us here in the u.s.
simon hobbs, art cashin made the point earlier on, if you need to sell, sometimes you go where the market is still open. >> interesting. maybe that's what happened. europe through the selloff until this point has been open, and what we've seen here in the united states has ensured there has been greater selling on the other side of the atlantic. just have a look at the chart. the beginning of the session was all about the struggle that those involved in the real economy, those involved in the backbone arguably of the economy, engineering, metals, energy -- the struggle that they are having with their earnings as arguably the environment gets worse. we fell at the beginning on those earnings and profit
warnings, but we have continued down on the three major markets -- london, frankfurt, and paris -- because of what you witnessed here. both sides of the atlantic are down. here's the close. >> the european markets are closing now. >> so a lot of red. let's just check some of the figures there. it seems to be -- the interesting thing is that, as we've gone through the session in europe, the indices have gone further into negative territory because the number of stocks in negative territory has grown. not because the stocks that are down have fallen further. so the breadth of the downturn, the breadth of the selloff, the breadth of the markdown, if you like, has grown throughout the session, but it was kicked off by those warnings, as i mentioned to you. if you're american, these are not consumer products. this is a big engineer coming out of sweden and a big aluminum player coming out of norway is
norsk hydro. alfa laval, the downturn is they're not shipping the orders. and you see the minerals fall as commodities obviously sell off. in luxury goods, have you heard of mulberry bags? they're a small london player. they went through the profit warning and have lost a quarter of their market cap. it's not huge. it's not one of the big luxury players around the world, but it's worth noting, and it took its uk peer burberry further into negative territory. not a good day for nokia to launch $1 billion in cash to boost its cash position as it attempts to survive with the launch of the lumina phones over the next three months. that's exactly what happened today. they have a convertible bond issued, and nokia is one of the worst fallers in europe today and was around the session. to my point, the losing stocks haven't gone further into negative territory, it's just
the breadth of the selloff that's grown. let me also just mention to you. finally, what's happening with the bond markets in italy and spain. a lot of people are saying what is happening in europe is about the bond markets. certainly, there have been downgrades in some of the regions of spain. i don't think that's what's happening because the bond market has sold off in europe after we found the selloff in wall street. see how you've got the yields rising later in the session on the spanish debt. the same is true of italy. this is not the cause of the selloff today. it's a symptom of risk off after very strong rallies. let's be honest about it. there you see italy, yields rising to 4.8% on the ten-year as the privilege cal bond market sells off and money rushes into other areas. >> let's get a look at the dow holding pretty steady at these levels, bob. >> it's hard to sort out what's going on here. i agree with the idea that
bernanke may not be there for a third team, maybe the presidential debate going more towards president obama was a factor too. don't kid yourself. earnings dropped eight points within a matter of minutes, within less than a half hour. earnings are clearly the major factor moving things although there may be privilege l ras. take a look at the major sectors today, for my 2 cents, what it's worth. there's no place to hide. not just materials being weak, dollars breaking out to a five-week high. you can see financials and even more defensive aspects of the market like health care and consumer staples are weak as well. six to one declining and advancing. nothing to the upside. you can take some comfort from the fact we're still only 4% from the four-year highs we had a couple of waeks ago as we started earnings season. we're not even close to any kind of correction territory. however, remember what's going
on with those bank stocks? remember those problems they're having with net interest margins impacting their profits. there are a few banks that have slipped into corrections territory. regions financial having most of the trouble today. they had not bad numbers, but the margin weighing on them just like they did wells fargo and other banks. those banks off of their recent highs. they hit their highs within a month ago, moving to the down side. there's a group to keep an eye on. let me just point out the real problem for the market right now. the real problem is hard to get 2013 revenue growth when you've got an earnings slowdown. a bullish argument already forming. here's the main arguments. the cost reductions and heavy restructuring are going to be ongoing into 2013. you'll hear more about big restructuring if we continue to get the weak revenue. slow growth still the most likely path in china and the u.s. guidance is very conservative for the fourth quarter, but it
was conservative for the third quarter, and they're still beating, they're going to beat in the fourth quarter on that conservative guidance. and we all know how good a shape corporate balance sheets are in now. here's the down side on a bullish day. back to you. >> check on energy and the commodities. oil is still the main story of the day, sharon. >> oil is definitely the main story of the day as we are looking at this slow growth scenario that seems to be played out and mentioned by many companies, whether we're talking about dupont or caterpillar. generally, traders, the sentiment is we're going to see slower growth. that is something that is definitely impacting oil prices here at home. we had the u.s. oil prices below $86 a barrel that's recovered somewhat. it is still at a three-month low. gasoline prices also falling, gasoline futures at a four-month low, and we're continuing to see weakness pretty much across the board in the energy complex. the issue here with even brent crude below $108 a barrel is that we are going to continue to see this into 2013 and the u.s. oil price might be pressured
even more because we are seeing production here at a 16-year high, and we're expecting to get another increase in oil inventories when the energy department reports its numbers tomorrow. in terms of what the u.s. drivers, it is good news. we're looking at pump prices going down, the national average down about 12 cents from what it was a week ago, $3.65 a gallon. much more on this on cnbc.com. >> busy day for you, sharon. thanks a lot. sticking with energy. gary kaminski is here with the big energy player on the floor. >> i love the known knowns and the unknown knowns, and one of the known knowns is the energy sector is going to be volatile depending what happens with the election. we're joined by the best energy professor rob raymond. we've got the s&p down 1.5% today. any thoughts on the overall market? obviously, you run money. you've got to have an opinion. >> the general view is we're witnessing a slowdown in global
growth, which in turn at the end of the day is really resulting in a big reduction in earnings estimates. >> you think it's about earnings, not about politics, maybe a combination of both? >> maybe a combination of both, but primarily about earnings. >> speaking of politics, i know you laid out for us the different scenarios in terms of how you invest in energy depending what happens with the election. if obama is reelected, you've got a bunch of pieces for how to position the portfolio. share with us that strategy. >> it's a risk off conversation in that the regulatory environment becomes more difficult and uncertain, which in turn makes it difficult to want to take a lot of risk. >> so in terms of less in your portfolio is certain types of energy names that are more favorable in a re-election of obama. >> more the value stocks, more income oriented, things with less risk and therefore less bait attached. >> things like the mlps and dividend yields, support in terms of that. >> romney gets elected in terms of the energy sector, he's obviously given a lot of
opinions and a lot of thoughts. more risk on in the portfolio. how would you be investing in that scenario? >> so i think the regulatory environment is probably clearer under romney which in turns allows us to take more risk and progress a portfolio that in term is more beta long, if you will, provides for potentially more alpha generation as well, as companies, if you will, the disruptive technology we've talked a lot about in the past is really unleashed and there's a lot of production growth and value creation as a result. >> give us examples of what that would mean in terms of stock selection. >> some of the smaller midcap and e&p companies focused on the newer generation based is the utica, certain parts of the permian basin, et cetera. certain values that allows us to take a greater risk. >> ironically, two of the areas, pennsylvania and ohio, that are the swing states in terms of this election, as many people think, are actually very big plays in terms of energy.
you've got thoughts in terms of that. share with us your thoughts. >> it's interesting. over the last several years you've heard us talk about disruptive technology and the concept of what's really happening is carbon landscape is diversified. specifically in two key states, ohio and pennsylvania, you have respectively the utica and the marcellus shales. historically, where energy policy hasn't been a big deal or mattered all that much, in today's deal it becomes critical in the election because those states rely on future job growth that are tied to that technology. >> let me ask you about job growth. you invest in a lot of these companies, public and private. is it the federal administration or the private capital that's created the job growth in these areas? >> well, almost exclusively over the last really decade, it's been the private sector. candidly for the government to take credit in any way, shape, or form to take credit for what's happened here in the u.s.
is nonsense. it's the private sector that's been 99% of the equation. >> thanks very much. carl, i wanted to ask that question to rob because you know it's a brilliant controversy in terms of it. we're fortunate to have a guy that's actually put capital in these privately held companies, and that's a nonpolitical statement, folks. that's the fact. the fact is he's allocating the capital, investing the capital in those private jobs that have created those jobs. >> talk about a story that goes from politics to the job market to geopolitical. it's a thread through a bunch of different things. let's get to bertha coombs. bertha, we've been talking about dupont. another name on the loser list. >> xerox as well, carl. twice the average daily volume over the last ten days or so, hitting a three month low here this morning. again, the company lowering its outlook for 2012. the only little bit of a silver lining in the earnings report is the fact that their services which are trying to grow for the first time over 50% of sales,
but the sales also came up short. not a very good storied today, carl. >> bertha, thanks so much. dow down 256. still in the midst of a sharp selloff. and in the words of austin powers' dr. evil, i shall call him mini me. find out if the rumored mini ipad will help apple on the road to continued world domination from our man on the inside.
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the yahoo finance. senior columnist and jp morgan's tom lee, and the yahoo traders show you the best places to hide out. congratulations to michael. let's get to rick san tesy in chicago tracking the selloff and looking at politics as well. >> a bit on the politics. there was a debate last night, but it's something that's come up and come up and come up. it was, of course, clinton tax
rates. it shouldn't be about clinton tax rates. it should be about growth rates. if we just want to pull one number out of the giant mega pie of numbers and data from the early '90s, just consider that. if you can go back to the same tax rate, what about the same fed funds rate which is 3% or the same tenure rate which was 5.5% or the same unemployment rate which was 6% or the same 30-year mortgage rate which was 7.5%. welcome, jeff carter. i can't believe that anybody wants to hear this anymore. it's just the craziest thing to pull out something in a static comparison and said, see, we had a much different economy. it was growing. >> well, it was a much different economy, and i think there was confirmation by us when you talk about the tax increase of 1993. you had other things in the underlying economy that were transforming the way we did business. greenspan in every single congressional testimony hearing would say, i can't believe this productivity. i can't believe the capacity utilization we're getting out of companies with less workers. it was a technological change
that really started to take hold in the '90s that we see evidence of even today. >> if i'm an investor, i'd rather pay 50% tax on 1,000 than 10% tax on 100. seriously, if you're making money, the whole approach of taxation in an environment of growth is just so different. why does the president and the administration make this a big banner when it's a silly banner? >> because i think they can engage in what's fair, and people emotionally get that. the real thing about taxes is they're revenue generators for governments to take money and reallocate the resources, and they're incentives for behavior. so if you drop tax rates in a certain area, people will behave differently, which is why, if you drop corporate tax rates, drop small business tax rates, they're going to do their math a little bit different, and they're going to either expapd or hire into areas that they think they can grow their business in. >> and we're not even going down in the weeds in terms of taxes because there were things you could write off, there were ways around the tax increase in the '90s, where amt's teeth were
still little itty-bitty baby teeth, not like they are today. >> and there was the research and development tax credit, which they brought back. there was always ways for wealthier people to avoid taxes in the way they recognize income, where middle class people, upper middle class people can't, and in certain occupations there's inform wanon you have a windfall tax, you can avoid it. or if somebody dies in your family and you're a farmer and you want to pass that estate along, you can't avoid that tax. >> of course, you had a theory that the first debates was the only debate that really mattered, and i thought for an interesting reason. >> i thought nobody understood who romney was all about. he had been defined by the obama campaign and his own ads, and they wanted to get a measure of the man initially. i think he came off as a confident, capable person. the second debate was about obama getting up off the canvas and engaging him. the third debate, i don't think,
changed anybody's minds. i call it a draw. >> so this was a catch-up. we know the president well. and after the first debate, the candidate was made known to a wider audience. at that point forward, really, it seemed like the debates changed very little. jeff carter, as always, thank you. >> just over an hour from now at the california theater in san jose, apple will likely unveil an ipad mini. we will talk to one of tech's biggest insiders about what he's expecting from today's big event. [ male announcer ] when it comes to the financial obstacles
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the dow down 242. some stocks in the green but not many. big winners on s&p are coach, harley davidson, ryder, yahoo, and radio shack. extraordinarily negative today. dupont with an extraordinary drag on the s&p with the earnings report this morning. meantime, we're an hour away from finally putting an end to the rumors and speculation about apple's newest products. will it finally include a special version of the ipad? here's what we know and what we don't and what we might expect. publisher of "9 to 5 mac" who tweeted potential ipad minis. is there any doubt the mini is
going to be the star of the show today? >> very little doubt. the only thing that could happen is some other product is going to be a bigger draw, but the fans are primarily after the mini today. >> steven nicholas took a look at the website today and said they've marginally raised their prices on the 2 and the 3. does that mean the mini comes in where some expect? >> i think it will come in above where the analysts are expecting. we're putting it around $329, give or take. i think most people expect it to be below $300. but that's an apple product. that's a higher quality product with a full ecosystem. >> you say that means perhaps they do not have to skimp on specs. what are the bells and whistles? >> i think everyone is expecting
a better camera than what you'd find on a nexus 7 or a kindle. maybe a 5 mega pixel back camera, whereas the base competitors don't even have a back camera. the processor will obviously be very fast to make sure you can -- the interface is smooth. so across the board, it's going to be a high quality product, just as you would expect from apple. >> finally, you heard some of the i-macs that are potentially going to be presented today, but it may be a game time decision. >> yes. actually, as of right now, we don't see i-macs being announced today. there's been supply chain issues, and i think they're probably going to show up in the coming weeks but definitely before the holiday shopping season. >> we'll see what happens in san jose in a little less than two hours. seth, good to have you. when we come back, goldman sachs says it's not too scared of the
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closed, things might get a little dicier. hasn't happened yet. >> yesterday we had a nice rally into the close. so we made up a lot of gains. u.s. is still in the forefront as far as day to day. it's all about earnings. we don't expect anything out of greece and spain just yet. they keep delaying that. we're going to focus on earnings. maybe we do have time to recover. >> breadth not encouraging, getting better, worse? >> volume is so hard to look at because there's not much to talk about as far as volume goes. plenty to talk about as far as earnings. all sectors are down today. just keep our heads above water. top line beats, bottom line misses, forecasts are weak. these things are recurring thoughts. these were headwinds we expected. we're getting them. we shouldn't be surprised at seeing selloffs. really shouldn't be. >> since zerp, since the fed launched that policy, market tends to do well on a fed day and even better when the prior day is very weak. do traders have any hope that tomorrow is going to bring some kind of relief? >> i can't imagine so. i really -- this is such a
different time because we're politically motivated. we have earnings. we have a lot of stuff going on. we're not going to be hypersensitive about what the fed is going to do. as a trader down here, i don't think we're looking for that as well. >> one of the things that's surprising is the obama end trade contract has fallen. most people would argue the market would prefer romney win. that notion doesn't seem to be helping any. maybe it is keeping us from falling further. who knows? >> maybe. i think it's becoming politically immune down here, believe it or not. just every little saying and stuff turns this market so much, so drastically because there's no volume and stuff like that. i'm not going to look into anything. we've got 15 gdays for all of that to sort out. >> it's going to be a long couple of weeks. names that have done well. largely u.s.-centric. even though they might be luxury names, consumer discretionary names. if your revenue comes from home, you tend to be doing better for whom it comes from europe or
china. >> we talked about that before. caterpillar was one with a lot of european exposure. they suffered greatly. u.p.s. was another one, they were down on their european exposure. yahoo is one i look at today. great company. they've got a turnaround story. the stock's performing nicely, up 90 cents last night. >> also hard to separate the weakness in some of the big industrials and energy names from oil, which is having a pretty misable day. talk about a big statement on the outlook for global growth. >> again, these are headwinds that we've seen. they've been staring at us for months and months and months. now it's all coming to a head. a 200-point move to the down side has given them opportunities to buy into. they said they're going to buy these dips. when we get to 13000 on the dow, maybe they step in and buy it. >> don't tell me 13000 on the dow. >> not today, but another 100 points down isn't a lot. >> ready to pose for the foresaken look in the papers tomorrow. >> 214 points